This is the main reason some college grads are struggling to find work — and it’s not AI

The shift to remote work, initially embraced as a pandemic-induced benefit, is now being identified as a deterrent to the employment prospects of young workers, according to economists. Research conducted by the Federal Reserve Bank of New York reveals that work-from-home arrangements have contributed to a significant increase in unemployment among young college graduates, accounting for 64% of the surge since the onset of the pandemic.

The study indicates that the absence of physical proximity in remote work settings makes it challenging for managers to effectively train and mentor young employees. As a result, companies may be hesitant to hire less-experienced individuals for distributed work arrangements. Natalia Emanual, a research economist at the Fed, highlighted this concern in a blog post, stating that employers may be reluctant to onboard recent graduates onto remote teams due to the difficulties in imparting necessary skills from a distance.

Statistics show a notable shift in the job market for college graduates under 29 years old. Between 2017 and 2019, the average unemployment rate for this demographic was 3.1%, whereas from 2022 to 2025, it rose to 3.7%. Emanual attributes the bulk of this increase in youth unemployment to the rise of remote work, asserting that the challenges faced by recent college grads precede the widespread adoption of AI technology.

While AI has not yet had a substantial impact on the overall U.S. labor market, it has been linked to a rise in layoffs within the technology sector. Reports from outplacement firm Challenger, Gray & Christmas reveal that nearly 50,000 job cuts this year are tied to AI, comprising 17% of the total job cuts announced in 2026. Analysts at Goldman Sachs estimate that AI has contributed to a 0.1 percentage point increase in the nation’s unemployment rate, particularly affecting less experienced workers.

In conclusion, the convergence of remote work and AI technology presents complex challenges for the employment landscape, especially for young workers and recent college graduates. As the workforce continues to adapt to these changes, policymakers and industry leaders must address the evolving dynamics of work environments to ensure equitable opportunities for all individuals entering the job market.

Edited by Alain Sherter